As Johnson & Johnson faces tens of thousands of lawsuits alleging its talc products caused users to develop cancer, a bankruptcy judge has granted the company a temporary reprieve.
U.S. Bankruptcy Judge Craig Whitley ordered a 60-day halt to talc litigation proceedings at a hearing Wednesday, according to a report from Reuters. The hearing focused on the case of LTL Management LLC, a J&J unit the company created to absorb its talc liabilities.
Under a legal strategy known as the “Texas Two Step,” J&J moved its talc litigation to the new unit, and that unit has filed for bankruptcy in North Carolina.
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After its bankruptcy filing, the J&J subsidiary filed a motion to try to halt the talc legal proceedings against its parent company. In the filing, the J&J unit argued the plaintiffs’ pursuit of legal claims against J&J shouldn’t be allowed under bankruptcy law. Instead, J&J has argued a $2 billion trust is an “equitable” way to resolve the litigation.
Aside from the 60-day stay, Whitley moved the bankruptcy case out of North Carolina and into New Jersey, Reuters reports. That is where J&J is based and where the multidistrict talc litigation is playing out.
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Johnson & Johnson faces about 38,200 lawsuits alleging harm from talc, according to a new quarterly Securities and Exchange Commission filing. While the company has faced some big losses in court, it’s been able to get some overturned on appeal.
That wasn’t the case for its most significant loss: A $4.69 billion verdict handed down from a jury in St. Louis was later reduced to $2 billion by a higher court. J&J had taken that appeal effort all the way to the Supreme Court, but the justices rejected the Big Pharma’s petition.
