Court Tosses J&J Bankruptcy Strategy To Skirt Talc Cancer Suits
A federal appeals court in Philadelphia rejected Johnson & Johnson's strategy of using bankruptcy to freeze around 40,000 lawsuits linking its talc products and cancer, which could force J&J to fight the cases for years in trial courts.
The Wall Street Journal:
J&J’s Talc Bankruptcy Case Thrown Out By Appeals Court
A federal appeals court in Philadelphia rejected Johnson & Johnson ‘s use of chapter 11 bankruptcy to freeze roughly 40,000 lawsuits linking its talc products to cancer, blunting a strategy the consumer health giant and a handful of other profitable companies have used to sidestep jury trials. The Third U.S. Circuit Court of Appeals on Monday dismissed the chapter 11 case of J&J subsidiary LTL Management LLC, which the company created in 2021 to move the talc injury lawsuits to bankruptcy court and freeze them in place. J&J is now exposed once again to talc-related cancer claims that have cost the company’s consumer business $4.5 billion in recent years and are expected to continue for decades. (Randles and Loftus, 1/30)
Reuters:
U.S. Court Rejects J&J Bankruptcy Strategy For Thousands Of Talc Lawsuits
The decision could force J&J to fight talc lawsuits for years in trial courts. The company has a mixed record fighting the suits so far. While the firm was hit with major judgments in some cases before filing bankruptcy, more than 1,500 talc lawsuits have been dismissed and the majority of cases that have gone to trial have resulted in verdicts favoring J&J, judgments for the company on appeal, or mistrials, according to its subsidiary's court filings. A December 2018 Reuters investigation revealed that J&J officials knew for decades about tests showing that the company’s talc sometimes contained traces of carcinogenic asbestos but kept that information from regulators and the public. J&J has said its talc does not contain asbestos and does not cause cancer. (Hals, Spector and Levine, 1/30)
NPR:
Appeals Court Clears The Way For More Lawsuits Over Johnson's Baby Powder
Plaintiffs attorneys cheered the decision, accusing Johnson & Johnson of trying to "twist and pervert" the bankruptcy code. "Bankruptcy courts aren't a menu option for rich companies to decide that they get to opt out of their responsibility for harming people," said attorney Jon Ruckdeschel. "And that's what was happening here." Johnson & Johnson promised to appeal the decision. (Horsley and Mann, 1/30)
In other pharmaceutical industry developments —
Stat:
FDA Offers Clues On How It Will Wield Authority On Post-Approval Trials
A Food and Drug Administration official on Monday gave more clues for how the agency plans to wield new authority to make drug companies enroll post-market clinical trials before granting speedy drug approvals. (Wilkerson, 1/30)
Modern Healthcare:
Cigna, CVS Health In Court Over Alleged Noncompete Violation
Cigna filed a lawsuit in the U.S. District Court for the Eastern District of Missouri on Thursday that alleges Amy Bricker, president of the company's Express Scripts pharmacy benefit manager, violated her employment contract. Cigna asserts the agreement bars her from taking senior roles with rival companies including "chief competitor" CVS Health, which operates the CVS Caremark PBM. (Berryman, 1/30)
