A US judge has rejected a bid by a group of cancer victims to block Johnson & Johnson from pursuing a proposed bankruptcy settlement of tens of thousands of lawsuits that allege the company’s baby powder and other talc products contain cancer-causing asbestos.
The group had sought a preliminary order in New Jersey on 11 June to prevent J&J from filing for bankruptcy outside the state, which would have effectively stymied the $6.48bn settlement plan. The motion was part of a class action lawsuit brought by plaintiffs’ lawyers opposed to the plan.
But US District Judge Michael Shipp said he could not grant the motion because any harm to the victims was “strictly hypothetical”. He said he had no jurisdiction to resolve a dispute over “events that have not, and may never, occur”, reports Reuters.
J&J hopes to garner support from 75% of claimants as part of the pre-packaged bankruptcy plan. It has set a 26 July voting deadline.
The company faces lawsuits from more than 61 000 plaintiffs alleging its talc caused ovarian cancer or mesothelioma.
J&J contends a bankruptcy settlement pays claimants fairly and equitably, as opposed to the civil justice system, in which most plaintiffs receive nothing while some win outsized awards.
Plaintiffs’ attorneys opposing the plan say it is a fraudulent attempt to put billions of dollars of the company’s assets out of plaintiffs’ reach, preventing them from getting the compensation they deserve.
J&J has failed twice to execute a bankruptcy manoeuvre aimed at ending current and future talc lawsuits. It has settled most mesothelioma cases outside bankruptcy, and this month finalised a separate $700m agreement to resolve claims from state Attorneys-General.
Reuters article – Cancer victims lose bid to block proposed J&J talc bankruptcy (Open access)
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Cancer victims want J&J talc bankruptcy blocked by courts
Cancer victims sue J&J over alleged ‘fraudulent’ bankruptcies
J&J agrees to pay $700m to resolve talc cases