Bankruptcy Judge Rejects J&J Baby Powder Settlement Plan

Johnson & Johnson (J&J) is facing thousands of lawsuits claiming their talc-based baby powder products caused ovarian cancer and other health issues. The lawsuits allege that the company knew its products contained asbestos, a known carcinogen, but failed to warn consumers. However J&J has consistently stated that its products are safe and do not contain asbestos. The company has also argued that the lawsuits lack scientific evidence linking its products to cancer. 

A U.S. bankruptcy court judge has denied Johnson & Johnson’s settlement plan related to baby powder containing talc, providing another setback in the company’s efforts to resolve the matter. Claimants with ovarian cancer and related claims to talc can now pursue their cases in civil court or through bellwether trials. However J&J used the "Texas Two‑Step" strategy spinning talc liabilities into a subsidiary (Red River Talc LLC) and pushing it into Chapter 11 aka avoiding paying real damages. 

Judge Christopher Lopez of the U.S. Bankruptcy Court for the Southern District of Texas, Houston division said in a court filing that J&J used a faulty voter solicitation process when dealing with personal injury claimants. Now Johnson and Johnson has chosen not to appeal the ruling. Instead, it will reverse ~$7 billion previously reserved and proceed with litigation in the tort system.