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Cancer victims urge US judge to dismiss J&J talc unit’s second bankruptcy

  • May 15, 2023

NEW YORK – Cancer victims on Monday urged a US judge to dismiss a Johnson & Johnson subsidiary’s second bankruptcy filing, saying that the company is abusing the bankruptcy system in its renewed attempt to resolve tens of thousands of lawsuits alleging that J&J’s baby powder and other talc products caused cancer.

The J&J subsidiary, LTL Management, filed in April for bankruptcy a second time, seeking to settle all current and future talc claims for a proposed US$8.9 billion (S$11.9 billion). LTL’s first bankruptcy was dismissed after a federal appeals court ruled that the company was not in financial distress and therefore not eligible for bankruptcy.

Plaintiffs have filed more than 38,000 lawsuits that have been consolidated in federal court in New Jersey alleging that J&J talc products sometimes contained asbestos and have caused their ovarian cancer or mesothelioma.

They portray J&J’s actions as an abuse of the bankruptcy system by a multinational conglomerate valued at more than US$400 billion and in little danger of running out of money to pay cancer victims.

J&J and LTL 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.

J&J has said its talc is safe, asbestos-free and does not cause cancer.

J&J said its new settlement offer has broad support from cancer victims, a claim disputed by lawyers who objected to the deal. J&J has not estimated the total number of talc claims it faces, and lawyers opposed to the deal said J&J’s settlement support number is inflated by claimants who have never filed lawsuits against the company and whose claims may not be fully vetted.

The healthcare conglomerate has not filed for bankruptcy itself. Instead, it divided its consumer business into two

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US veterans suing 3M over earplugs seek to stop unit’s ‘false alarm’ bankruptcy

  • May 13, 2023

April 19 (Reuters) – U.S. veterans and members of the military on Wednesday urged a judge to dismiss 3M’s (MMM.N) bid to use the bankruptcy of its subsidiary Aearo Technologies to shield itself from nearly 260,000 lawsuits over military-issue earplugs that former users allege were defective and damaged their hearing.

3M and Aearo say the earplug litigation has spiraled out of control. But attorney Adam Silverstein, who represents veterans suing 3M over hearing loss, said at a court hearing in Indianapolis that filing for bankruptcy, like “pulling a fire alarm,” should be reserved for urgent threats.

Aearo was not in need of emergency rescue, because it had filed for bankruptcy solely as “a strategic alternative to managing 3M’s litigation,” Silverstein said.

“If the firemen determine something is a false alarm, they don’t wait around to see if a fire might start later or if there’s some other problem they can assist with,” he said. “They leave.”

Aearo, which made the combat arms earplugs, filed for bankruptcy last July, with 3M pledging $1 billion to fund its liabilities stemming from the lawsuits that accuse both Aearo and 3M of misrepresenting the earplugs’ effectiveness, leading to hearing damage.

The plaintiffs have called that move a bid to escape the Florida federal court where the earplug lawsuits are consolidated in a so-called multidistrict litigation, following a series of unfavorable legal rulings and trial losses.

On Tuesday, Aearo attorney Chad Husnick said U.S. law does not require the “house to be on fire” before a company files for bankruptcy. Aearo should be allowed to proactively resolve the growing problem of earplug lawsuits through a bankruptcy settlement, Husnick said.

U.S. Bankruptcy Judge Jeffrey Graham will continue to hear evidence on Thursday before he makes a ruling on whether to dismiss the case.

3M’s bankruptcy

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December 2023
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