In a relief for pharmaceutical giant Johnson and Johnson, a US court on Thursday halted at least 38,000 out of the 40,000 lawsuits that allege that its baby powder and other talc-based products cause cancer.
US Bankruptcy Judge Michael Kaplan, however, allowed other cases to proceed with depositions and other matters as long as no trials commence, a Reuters report said. New lawsuits can also be filed against the pharmaceutical company, the judge added.
The halt in lawsuits will give Johnson & Johnson time to get court’s approval of an $8.9 billion settlement which was announced on April 3 this year, Bloomberg reported. All the lawsuits have been consolidated in a federal district court in New Jersey.
However, the report added that the pharmaceutical company had sought complete relief from lawsuits as part of the bankruptcy case involving its subsidiary LTL Management.
Plaintiffs have argued that Johnson and Johnson’s talc contain asbestos which causes gynecological diseases like ovarian cancer and mesothelioma. However, the company has said that its talc is safe, asbestos-free and does not cause cancer.
Johnson & Johnson’s settlement plan
As a part of the “Texas Two step” bankruptcy law, the US pharma giant in October 2021 offloaded the lawsuits onto a new subsidiary, LTL Management, which then declared bankruptcy.
However, the bankruptcy filing was invalidated in January this year. The new subsidiary filed its second bankruptcy in early April in a bid to present a settlement plan by May 14.
Johnson and Johnson and its subsidiary have argued that bankruptcy delivers settlement payouts more “fairly, efficiently and equitably” than a “lottery” offered by trial courts, where some litigants get large awards and others nothing.
Johnson and Johnson has claimed that over 60,000 litigants support the proposed $8.9 billion settlement. But lawyers representing those opposing the billion-dollar settlement have dismissed the company’s claim.
They have accused the pharma company of abusing the bankruptcy system, adding that a multinational conglomerate valued at more than $400 billion is in little danger of running out of money to pay cancer victims.
“We continue to believe that this bankruptcy effort is illegitimate and that stance will be affirmed through the appellate process,” Reuters quoted Leigh O’Dell, one of the lead lawyers for plaintiffs, as saying.
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