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In a big win for plaintiffs suing over Johnson & Johnson’s baby powder, an appeals court dismissed a Chapter 11 talc case that had halted trials across the country.

On Monday, the U.S. Court of Appeals for the Third Circuit found that the subsidiary, LTL Management, which had a $61 billion funding agreement with Johnson & Johnson, was not in financial distress when it filed for bankruptcy in 2021. The ruling reverses a Feb. 25 decision by U.S. Bankruptcy Chief Judge Michael Kaplan of the District of New Jersey.

Federal Judge Thomas Ambro of the Third Circuit.

“Good intentions—such as to protect the J&J brand or comprehensively resolve litigation—do not suffice alone,” Judge Thomas Ambro wrote in the unanimous opinion. “What counts to access the bankruptcy code’s safe harbor is to meet its intended purposes. Only a putative debtor in financial distress can do so. LTL was not.”

The ruling is a big win for plaintiffs alleging in nearly 40,000 talcum powder cases that Johnson & Johnson’s baby powder caused ovarian cancer or mesothelioma.

“The doors to the courthouse, which had been slammed shut by J&J’s cynical legal strategy, are once again open, as they should be,” wrote Leigh O’Dell, a partner at Montgomery, Alabama’s Beasley Allen who is co-lead plaintiffs counsel in the talc multidistrict litigation. “Given that, we will immediately seek to return these cases to their rightful venues in federal and state district courts, efficiently schedule and conduct trials, and establish the liability of Johnson & Johnson for the deaths and disease suffered by thousands of women.”

Chris Placitella of Cohen, Placitella & Roth in Red Bank, New Jersey, is liaison counsel in talc multidistrict litigation and represents mesothelioma clients. Placitella said he expected filing new complaints immediately, saying, “it’s over.”

“With all due respect to