Judiciary committee chair decries two-tiered system of justice shown by J&J bankruptcy efforts

WASHINGTON – Johnson & Johnson’s attempts to evade responsibility for tens of thousands of ovarian cancer and mesothelioma lawsuits through an abuse of the bankruptcy system were further exposed in an hour-long CNN report, Shaken: Baby Powder on Trial, which aired Sunday, May 7.

“There’s a justice system for rich people and powerful corporations, and then there’s the justice system for everybody else,” said Sen. Dick Durbin, D-Ill., Chairman of the Senate Judiciary Committee in an interview included in the broadcast. He further noted that J&J’s efforts should be considered “an abuse of bankruptcy law” and that the courts need to send “a clear message to corporate America that you can’t escape your liability by some phony bankruptcy filing.”

Following the dismissal of J&J’s initial bankruptcy effort by the Third Circuit Court of Appeals in January – based in part on the lack of corporate financial distress that would justify the move – the company waited just over two hours to file a second petition for bankruptcy for its LTL Management subsidiary. That move effectively created further delays and again denied the rights of talc victims to pursue their claims through multidistrict litigation, as well as state courts.

In the second bankruptcy filing, J&J’s proposed “funding agreement” for expenses related to the litigation was drastically reduced to create a perception of financial distress lacking in the first filing. Attorneys for the plaintiffs have filed a writ of mandamus with the Third Circuit asking the Court to issue an emergency decision reversing the bankruptcy court’s preliminary injunction decision in the second bankruptcy, reopening the courts to federal and state civil trials or supporting more serious negotiations for an equitable resolution of the claims.

“The CNN report and Sen. Durbin’s comments clearly showed the absurdity of J&J’s arguments in support of each attempt at bankruptcy and the troubling prospect that if this scheme is successful, other companies responsible for dangerous products could follow a similar strategy,” said Leigh O’Dell, of the Beasley Allen Law Firm and co-chair of the plaintiffs’ steering committee in the multidistrict litigation in New Jersey federal court. “These women and families have a constitutional right to present in court the evidence of J&J’s knowledge of the dangers of talc use, the presence of asbestos in its product, and the corporate schemes used for years to conceal that evidence.”

“Johnson & Johnson would prefer to pay its lawyers rather than customers they have victimized,” says Michelle Parfitt of Ashcraft & Gerel, and co-chair of the plaintiffs’ steering committee in the federal court multidistrict litigation.  The typical claimant faces approximately $500,000 in medical expenses and lost wages.  J&J is proposing  payments of a small fraction.  “Disgraceful for a company that reported revenue last year of $94 billion,” says Ms. Parfitt.

The CNN documentary illuminated evidence that for many years Johnson & Johnson knew about the existence of asbestos in its talc but sought to conceal it.  In 2019, J&J recalled 33,000 bottles of Johnson’s Baby Powder after the FDA found small amounts of asbestos in a bottle it tested. The company has announced a global ban on sales of baby powder containing talc by the end of this year.

To hear more from the women and men who are challenging Johnson & Johnson’s abusive tactics click here.