Johnson & Johnson began its $10 million legal battle in an effort to end the case that claims its baby powder is causing ovarian cancer among consumers.
The company is now trying to convince a judge to sign off on its third attempt to resolve the thousands of lawsuits through the bankruptcy of a subsidiary. The one in charge of deciding the fate of J&J is U.S. Bankruptcy Judge Christopher Lopez in Houston.
Baby Powder and Cancer
The situation comes after a weeks-long court hearing that weighed competing demands to approve the settlement or end the bankruptcy altogether. The company is trying to take advantage of the bankruptcy of its subsidiary to resolve multiple lawsuits that come from more than 62,000 plaintiffs.
The latter are claiming that J&J's baby powder and other talc products were contaminated with asbestos and resulted in many consumers getting ovarian and other types of cancers. This is a claim that the company explicitly denied, according to Reuters.
While courts have previously rejected two of J&J's efforts to resolve the talc litigation through a subsidiary's bankruptcy, the company is trying again in a different bankruptcy court. The company argues that its third attempt can succeed, whereas its previous efforts did not, because the subsidiary, Red River Talc, has votes that show a broad level of support for its settlement proposal.
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J&J's $10 Million Legal Battle
Red River Talc attorney Allison Brown said in court that they have the vote, adding that there was significant support for a "historic and unprecedented plan." Opponents, on the other hand, argue that the vote was rigged to ensure that J&J gets its preferred conclusion to the case.
The judge in the case will hold a marathon court hearing to hear supporters and opponents of the company's bankruptcy proposal. The hearing will last until the end of February 2025, when Lopez will consider evidence on various topics, the Independent reported.
These include the validity of the votes that J&J said it gathered last year and whether such a massive company should be allowed to use the bankruptcy of a subsidiary to protect itself from lawsuits.
A business litigation reporter with Reuters, Dietrich Knauth, said that the case is a pivotal battle over whether or not bankruptcy can or should be used for this particular type of settlement. It comes as J&J is not bankrupting itself in any measure of the word as it has a lot of funds to pay off debts, as per Yahoo Finance.
