Johnson & Johnson will not appeal the dismissal of its bankruptcy proposal.
The U.S. Bankruptcy Court in Houston on Tuesday dismissed Johnson & Johnson’s latest bankruptcy bid to resolve thousands of lawsuits related to its talc baby powder, according to several media reports.
J&J and its subsidiary, Red River Talc, had proposed a $9 billion bankruptcy package to settle cancer claims linked to its talc product. If approved, it would have been one of the biggest mass tort settlements in history. But, as per reporting from the Associated Press, Judge Christopher Lopez found that when J&J tried to get 75% of claimants to accept the settlement, the pharma improperly solicited votes—in turn invalidating most of the responses.
In a statement following the dismissal, J&J insisted that its settlement plan was “supported by the overwhelming majority of the claimants.” The pharma will not appeal the decision and will instead “return to the tort system to litigate and defeat these meritless talc claims.” In line with its decision to fight these claims in court, J&J will also pull some $7 billion that it had previously set aside for the bankruptcy proposal.
According to its press statement on Tuesday, J&J has already settled 95% of the suits related to mesothelioma linked to talc and closed all State consumer protection claims. The company has also closed supplier disputes.
J&J has been fighting off talc-related litigation for 16 years. The first complaint was filed in 2009 by a 49-year-old South Dakota woman named Deane Berg who claimed that J&J’s product caused her ovarian cancer. She was offered a $1.3 million settlement but decided to push through with her suit. She won in 2013 but received no payment from the pharma.
Since then, thousands of individual and class-action lawsuits have been filed against J&J, each linking the talc powder to cancer. In connection with these cases, J&J over the years has also been forced to pay billions to these claimants. Once, in July 2018, the pharma was ordered by a judge to pay nearly $4.7 billion to 22 cancer patients.
In September 2024, J&J pulled the Texas two-step, a legal maneuver that involves the creation of a new entity—Red River, in this case—and transferring to it the majority of the tort liabilities, while only giving it limited resources. This new entity, in turn, files for bankruptcy, effectively allowing the parent company to minimize its legal exposure.
At the time, the pharma said this settlement plan “would resolve 99.75% of all pending talc lawsuits against Johnson & Johnson and its affiliates.” Despite putting billions of dollars on the line to resolve the talc litigation, J&J maintained that the claims have no merit.
