If the manufacturer made payments or settlements, Medicare and Medicaid costs associated with talcum powder lawsuits could be recouped. Yet Johnson & Johnson has chosen to pursue a bankruptcy scheme known as “Texas Two Step,” which has prevented litigation from moving forward for over one year. Despite having billions in assets to cover damages caused by their actions over decades, they have chosen not to settle these claims.
Rep. Cohen’s letter comes just weeks after the U.S. Court of Appeals for the Third Circuit denied Johnson & Johnson’s bankruptcy petition, finding that their fully owned subsidiary established to absorb this lawsuit is in no financial trouble. Nevertheless, Johnson & Johnson has indicated they intend to further delay proceedings by requesting a review by the U.S. Supreme Court and a rehearing in the case.
Federal Spending on J&J’s Talcum Powder in the U.S.
Cohen asked the GAO in a letter how much money has been spent on healthcare and medical treatments related to talcum powder-related ailments by departments such as Defense, Veterans Affairs, Justice and HHS since 1972.
Cohen asserts that Johnson & Johnson has known since the 1970s about the cancer-causing potential of talc fibers present in its Baby Powder products. He maintains that they kept selling this contaminated talcum powder to women of color and overweight individuals.
Cohen asserted that these potentially fatal and debilitating conditions were entirely avoidable. Taxpayers must be made aware of the societal costs associated with corporate misconduct.
Litigation Update: Talcum Powder Case, February 2023
After the original judge overseeing the federal talcum powder MDL (Multidistrict Litigation) recently retired, U.S. District Judge Michael A. Shipp was appointed to preside over the litigation earlier this month.
Bellwether trials, originally scheduled to start in early 2022 but postponed due to the bankruptcy stay, provide parties with insight into how juries will respond to evidence and testimony used in potentially thousands of cases that will eventually go before juries across America.
According to its bankruptcy filing, Johnson & Johnson has already spent $1 billion defending against talc ovarian cancer claims and the $3.5 billion paid out in Baby Powder settlements and judgments. Analysts predict that Johnson & Johnson will need to spend at least $10 billion to resolve all cancer-related lawsuits against them.
However, if these cases go to trial, Johnson & Johnson could potentially be held liable for much larger sums of money in settlements of individual talcum powder lawsuits.