Johnson & Johnson
Johnson & Johnson has lost some significant cases resulting in large judgements for damages relating to ovarian cancer and mesothelioma. Our original page with background information can be read here. where we set out how this links to asbestos, which is our area of practice.In October of 2021 Johnson & Johnson created a subsidiary corporation; LTL Management LLC, an entity created specifically to handle the massive liability facing Johnson & Johnson as a result of asbestos and other contaminants contained in its talc products. Johnson & Johnson is headquartered in New Brunswick, New Jersey, with corporate offices throughout the country. LTL Management was incorporated in New Jersey using the J&J headquarters address as their legal address for service.
Within days of incorporation, LTL Management filed for Chapter 11 Bankruptcy in the convivial bankruptcy court in North Carolina. This was after over 38,000 liability claims open against Johnson & Johnson were transferred into the purview of LTL Management Inc. The speed of this is an indication of the effort expended by J&J to make this happen. J&J put notices on their web site confirming they intended to use LTL Management to establish a trust to pay mesothelioma and ovarian cancer claims on October 15, 2021 immediately following LTL’s Chapter 11 proceedings issued on October 14, 2021.
Chapter 11 provides protection from creditors, including personal injury claims. In the case of Johnson & Johnson those included claims for ovarian cancer and mesothelioma. The mass toxic tort litigation firms protested this, claiming that this was clearly a move on behalf of J&J to delay, and reduce, their litigation expenditures. This move, if allowed, would end all past, present and future litigation relating to talc against the company by channeling it to a compensation trust.
The first argument raised by a coalition of plaintiffs lawyers was about the filing of the bankruptcy petition in affable North Carolina. The corporation has no ties to the state. After the filing of extensive briefs and hours of hearings the jurisdiction for the bankruptcy proceeding was decided to be New Jersey where LTL was incorporated and based.
Johnson & Johnson’s legal counsel argued that the handling of this case in the bankruptcy court would ensure that all same level claimants would receive consistent treatment of all claims by establishing a trust similar to those established for other toxic torts. Johnson & Johnson funded LTL with the sum of $2 billion when it was incorporated, and have agreed to another $61 billion for talc injury claimants once the plan has been negotiated.
In February of 2022 a single bankruptcy court judge, Judge Michael Kaplan, decided that the formation of an asbestos style trust for the processing of claims arising from cosmetic talc would be permitted. It was his opinion that with the number of claims started against J&J it would take “thousands of years” for the cases to be individually tried and subsequently appealed, commenting that many claims were already a decade old and to the present date only 49 cases had reached a verdict; some finding for J&J and others for the plaintiffs, all of which are being appealed. Every trial comes with huge expenses to all parties involved.
Judge Kaplan further opined that the US court system is not capable of handling the 38,000 cases currently on the books. Unfortunately, most cosmetic talc claimants will be deceased before their case gets heard. On these facts he based a decision that the Chapter 11 proceedings would be allowed to continue and an asbestos style trust established.
Of note Judge Kaplan and his staff have received threats of bodily harm as a result of this decision. Plaintiffs and their lawyers are hot under the collar over this issue and some believe that it is/was judge Kaplan’s decision standing between them and a high compensation judgement. His decision was, of course, appealed.
On January 30, 2023, it was decided by a federal court panel of three appeal court judges that the Bankruptcy proceeding would not be permitted to continue. Their opinion was based upon the fact that Chapter 11 proceedings were designed to be used by companies teetering on the edge of financial ruin due to looming litigation, judgements and future liability. In the opinion of the panel, Johnson & Johnson was not in a precarious position and could afford to pay judgements for their corporate negligence. The stay of litigation granted in February of 2022 by Judge Kaplan of the New Jersey bankruptcy court was overturned.
Johnson and Johnson in response to this ruling has indicated that they will appeal to a higher court in an attempt to secure their right to establish a litigation trust rather than face thousands of individual personal injury actions that will keep their litigation department busy for decades, if not generations. No hearing date for the appeal is scheduled yet.
While the personal injury bar in the United States is pleased that they can once again sue Johnson & Johnson at will, this is not helpful to persons damaged by Johnson & Johnson products in Canada. Navigating the US court system is time consuming and very costly. A Canadian lawyer would need to associate with an American lawyer/firm licensed to practice in the state where the case is to be litigated. J&J headquarters is in New Jersey, the bankruptcy proceedings of LTL are now in New Jersey while the Chapter 11 proceedings decision was appealed to a Panel of judges in Pennsylvania. The general rule of thumb is the action should take place where the damages occurred, where the plaintiff resides or where the defendant operates.
How long the situation will remain in flux is unknown. The wheels of justice move exceedingly slow. As quoted from The Blacklist “wheels turn, justice sits.”
Toxic tort trusts have been open to applications from Canadians who apply on the same footing as American claimants. We would expect that to be the case in this scenario given their sales of talc in Canada. Having a trust established would be far better for injured Canadians, in our opinion.
A compensation trust is a long way from being established and there is a strong possibility that it never will come to pass. We are taking names in an attempt to document claims for seriously injured persons injured by J&J talc products so we can preserve any evidence before too much time passes.
Update March 22, 2023
Johnson & Johnson appeal to the have the case reviewed by the full US circuit Court of Appeal was denied causing J&J to state it will seek review by the U.S. Supreme Court. The company continues to suggest to the court and the public that a Chapter 11 asbestos style litigation trust is the only way this can end with any beneficial outcome for injured talc users.
Update, April 4, 2023
Johnson & Johnson issued in a press release that it's subsidiary LTL Management has re-filed for voluntary Chapter 11 bankruptcy protection with an additional 6.9 Billion in funding. This brings the funding commitment by J&J to 8.9 Billion dollars. The company is also pushing for support for their proposal with mass tort litigation firms and the public indicating that they have the agreement of over 60,000 current litigants to the proposed plan. Johnson & Johnson continue to deny liability for all ovarian cancer or mesothelioma claims. They state that this filing is done in good faith and intended to resolve this contentions situation without decades of litigation. We continue to monitor this ongoing situation.
Update April 21, 2023
J&J is again attempting to have their proposal approved for channeling cases into the bankruptcy of their recently created subsidiary, LTL Management. They have again sought the approval from federal court Judge, Michael Kaplan. Judge Kaplan previously decreed that an asbestos style trust would be permitted. His decision was subsequently overturned but with additional funding and coalition with a number of mass tort firms and plaintiffs they went back to Judge Kaplan with a narrower proposal.
After a hearing in the New Jersey Federal bankruptcy court on the issues on Thursday April 20, 2023 where J&J's lawyers advised regarding the status of negotiations necessary to establish an asbestos style litigation trust. They also stated that they have over 60,000 plaintiffs committed to vote for a bankruptcy plan to establish a litigation trust, funded by J & J with 8.9 Billion dollars.
Accepting those facts, Judge Kaplan suspended all movement in personal injury claims already filed and open, until mid-June 2023, giving the legal teams time to amend and negotiate a proposal to permanently end all disease claims against J&J.
This order does not include new injury cases issued after the date of the stay order but should the plan be approved they too will get absorbed by the compensation trust as opposed to the court system.
This draft plan, as negotiated, is to be presented to Judge Kaplan in mid-May for either approval or to be granted additional time if negotiations are making progress but not yet complete. We will report on the news from this hearing.
The likelihood of a talc trust appears more possible after this latest ruling. Limitation dates are still running for claims issued or going to be issued against Johnson & Johnson.
Update, June 15, 2023
The draft plan is now complete and Judge Kaplan will review submissions with a hearing scheduled for July 11, 2023 with another court time slot on August 2, 2023 for any outstanding issues.
Update, August 4, 2023
On August 2, 2023 Judge Michael Kaplan dismissed the Chapter 11 bankruptcy filing of LTL, the created corporate J&J subsidiary, where the company intended to park their thousands of claims related to cancer, allegedly caused by talc. Judge Kaplan agreed with the argument made by lawyers for various Plaintiffs that LTL was not in immediate financial distress to justify the bankruptcy proceedings. This means that law suits filed against Johnson & Johnson may proceed for the present time.
Johnson & Johnson had indicated that they will appeal this decision while Plaintiff counsel were seeking an order that LTL not be permitted to file a 3rd bankruptcy attempt for at least 180 days. This situation is far from resolved.
If you have been diagnosed with ovarian cancer or mesothelioma and used talc products, specifically those manufactured by Johnson & Johnson, contact Brown Law to learn about other compensation options. Talking to us is free and carries no obligation.