The long-held pause in talcum powder litigation due to bankruptcy stay has finally been lifted, allowing plaintiffs to proceed with new claims. For years, subsequent bellwether trials have been stagnant owing to objections against the alleged bankruptcy. The litigation battleground continues to evolve as the Third Circuit Court of Appeals denied the bankruptcy filing in March 2023, catalyzing active litigation under the federal talcum powder Multi-District Litigation (MDL), first established in 2016.
Johnson & Johnson, having financial reserves in billions, attempted the “Texas Two Step” move in 2021. This maneuver transferred all lawsuit liability to a newly formed subsidiary, LTL Management, LLC. The next move in the plan was an instant bankruptcy filing by LTL under protection laws. After a period filled with numerous challenges, the Court declared that LTL did not exhibit financial distress genuine enough to warrant a bankruptcy filing.
Second Bankruptcy Filing and Its Rejection
As preparations were in order to restart the litigation process in early 2023, Johnson & Johnson initiated a new bankruptcy filing in conjunction with a proposed $8.9 billion talcum powder settlement fund. However, this strategic move met with objections from the plaintiffs. They alleged that such an action would compel those afflicted with cancer to settle for minimal offers and bar future victims from seeking justice through the civil court system.
Last month, a turning point in this legal battle was marked when U.S. Bankruptcy Judge Michael B. Kaplan struck down the second bankruptcy. This decision was based on its “bad faith” filing and the fact that LTL Management did not display genuine signs of financial distress despite claims of financial hardship. Thereby setting the stage for active litigation to proceed once again.
Judge Michael Shipp was assigned to take over the management of talcum powder lawsuits following the retirement of U.S. District Judge Freda Wolfson earlier this year.
Fighting Against Further Delays
- Plaintiffs’ attorneys have cited that many individuals entangled in these lawsuits are already battling life-threatening cancer, and some tragically lost their lives while awaiting their day in court due to Johnson & Johnson’s persistent, albeit unsuccessful, delaying tactics.
- Attempts are now being made to prevent further delays by opposing Johnson & Johnson’s plans to appeal against expert witness testimony – despite these challenges having already been addressed by Judge Wolfson years ago.
- Such objections to the alleged plans to reargue Daubert motions were confirmed in a recent letter to the court issued on August 23.
In the letter to the court added to the Lawyers.Buzz case, plaintiffs’ attorneys voiced their concerns. “After delaying this MDL litigation for nearly two years via multiple failed bankruptcy efforts, defendants seek to further delay bellwether trials by redoing that which has already been done in this case.” They seem determined to curtail any further delays.
Advocating For an Expedited Trial Preparation
With the initial talcum powder lawsuit’s hiatus due to bankruptcy stay, the parties had been planning for a series of bellwether trials. These trials are essential to assess how different juries might respond to evidence and testimonies that are likely to be replayed throughout the litigations. To counter the lost time, plaintiffs are now pressuring the court for an expeditious trial preparation.
In their call for rapid action, plaintiffs penned another letter to Judge Shipp in August. The letter urged for the cases to be moved towards trial “expeditiously.” In response to the letter, Judge Shipp scheduled a status conference for September 6.
The ongoing legal battle clearly illustrates an intricate system of justice where the powerful are held accountable while striving to ensure every individual’s right to justice. Hopefully, this unfolding saga will serve as an educational premise for those interested in the legal aspects of large-scale litigation and corporate governance.