A U.S. bankruptcy judge has rejected Johnson & Johnson’s $10 billion proposal aimed at resolving tens of thousands of lawsuits alleging that its baby powder and other talc products caused ovarian cancer. This marks the third time the company’s bankruptcy strategy has failed in court.
J&J has been trying to address the lawsuits through the bankruptcy of a subsidiary company after two prior attempts in other courts also failed, according to Reuters.
U.S. Bankruptcy Judge Christopher Lopez, overseeing the case in Houston, ruled that the company did not belong in bankruptcy. “While the Court’s decision is not an easy one, it is the right one,” Lopez stated.
The judge criticized J&J’s proposed settlement, stating it lacked sufficient support from women who claimed J&J products caused their cancer. He also noted that the proposal went too far by releasing legal claims against entities that hadn’t filed for bankruptcy, including retailers that sold J&J products and Kenvue, a consumer health business that J&J spun off in 2023. Lopez concluded that the proposal had too many issues to be addressed through bankruptcy.
In response, J&J said it would not appeal the decision, but reiterated that it had no intention of settling the claims. Instead, the company plans to “return to the tort system to litigate and defeat these meritless talc claims.”
Andy Birchfield, an attorney representing plaintiffs opposed to the bankruptcy settlement, argued that J&J’s bankruptcy strategy was an attempt to avoid full accountability. “With this ruling, we are now moving forward without delay to trial, where our clients will finally have the chance to present their cases before a jury and obtain the justice they deserve,” Birchfield said.
J&J had argued that the third bankruptcy proposal should succeed due to the larger settlement amount and the support it received from a majority of cancer victims who voted in favor of the deal.
