Johnson & Johnson bankruptcy will NOT protect it against asbestos lawsuit from former employees


Johnson & Johnson (J&J), the largest pharmaceutical company in the world, will not be able to avoid a lawsuit that alleges it exposed employees to cancer-causing asbestos while manufacturing its baby powder. 

On Tuesday, Federal Judge Michael Kaplan ruled that the company’s recent bankruptcy filing in Texas will not allow it to evade the class-action suit, Endpoints News reports.  

The company faced thousands of lawsuits over allegations that its iconic baby powder product – which has since been pulled from shelves in the U.S. and Canada – was contaminated with asbestos, and caused cancer in dozens of people.

A loophole in Texas allowed the company to create a new company which would hold all of its liabilities, and then the shell company filed for bankruptcy – with the same court ruling that the move settled around 38,000 lawsuits filed against the company related to the baby powder. 

This class-action suit will not be included within the bankruptcy settlement.

A New Jersey court struck down a bid from Johnson & Johnson to have liability for a class-action lawsuit related to its baby powder be transferred to a shell company in Texas, that would then be settled in bankruptcy (file photo)

New Brunswick-based J&J has received thousands of suits in recent years, almost all related to potential asbestos exposure due to using its products.

The baby powder that falls at the center of these allegations uses a talc-based formula. While the mineral in itself is safe, it is often pulled from the same mines as asbestos, a carcinogen that used to be used in some building materials. 

Inhaling asbestos can cause a variety of issues for a person. Mesothelioma, a cancerous tumor that can form on the outside of a person’s lungs, heart and other organs, is most commonly associated with the mineral.

Michael Kaplan (pictured), a New Jersey federal judge, granted J&J the ability to settles the suits in bankruptcy earlier this year, but chose not to include a class-action suit

Michael Kaplan (pictured), a New Jersey federal judge, granted J&J the ability to settles the suits in bankruptcy earlier this year, but chose not to include a class-action suit

In October 2019, the Food and Drug Administration (FDA) recalled the J&J powder after finding traces of asbestos in a bottle.

The FDA then performed a review of J&J talc products, and detected asbestos in nine of 43 samples tested.

In the time since, it has been revealed that some executives at the company were aware of the potential asbestos risk decades prior to the FDA revelation, and the company has even been accused of performing horrendous human experiments. 

While the powder has since been pulled from the U.S. and Canada, it is still available elsewhere in the developing world.

To avoid facing penalty, J&J formed LTL Management, a company that held all of the liabilities related to the thousands of lawsuits the company faced. 

That company then filed for bankruptcy in Texas, taking advantage of the state’s business-friendly laws to include the settled suits in the filings.

In February, Kaplan ruled in favor of J&J in a shock decision.

‘The Court is aware that its decision today will be met with much angst and concern,’ Kaplan wrote, as reported by Endpoints.

‘Nonetheless, the matter before the Court is so much more than an academic exercise or public policy debate. These issues impact real lives.’ 

J&J was hoping that the complaint from former workers would be included as well, but Kaplan ruled this week that it would be excluded.

J&J faces allegations that its talc-based baby powder was contaminated with asbestos, leading to dozens of cases of cancer. The product has been pulled from shelves in the U.S. and Canada but is still sold in some parts of the world (file photo)

J&J faces allegations that its talc-based baby powder was contaminated with asbestos, leading to dozens of cases of cancer. The product has been pulled from shelves in the U.S. and Canada but is still sold in some parts of the world (file photo)

Now with the ruling in place, the family of Louis Edley will file a complain in the New Jersey Superior Court, alleging that he was exposed to the carcinogen while working with talc at a J&J subsidiary. 

Edley developed a chronic lung disease in the 1980s, and filed a suit against the company that was eventually tossed. Company officials said that there was no tests that proved the company’s products had talc.

Years later, many others began to fall ill, before the FDA made the fateful discovery in 2019.

‘In each case, J&J misleadingly asserted the false defense through its attorneys and representatives that no evidence whatsoever existed indicating that J&J/Windsor’s Industrial Talc ever contained asbestos,’ court documents read, per Endpoints.

The company is facing charges of fraud and evidence concealment.  

‘We look forward to the opportunity to pursue justice for the Edley family and the members of our class,’ Chris Placitella, who is serving as the Edley’s lawyers, told Endpoints.

Mounting suits have not hurt the company much financially, though. According to an analysis by Fierce Pharma, J&J is still the largest pharma company in the world, with revenue even growing by 14 percent last year.

The worldwide distribution of the COVID-19 vaccines, along with many other consumer products, have proved to be a boon for the company. 

Read more at DailyMail.co.uk