US Judge Turns Down J&J $10 Billion Settlement over Cancer Victims

A U.S. bankruptcy judge rejected Johnson & Johnson’s $10 billion proposal to end its massive lawsuit through a subsidiary company’s bankruptcy, marking the third time the company failed to use bankruptcy strategy in court.

J&J is a US pharmaceutical company that is facing a lawsuit from more than 60,000 claimants. They stated that the company’s baby powder and other talc products sold from 1894 until 2020 contained asbestos and caused ovarian cancer. 

The company used a bankruptcy strategy to settle for the third time but was rejected by Houston Bankruptcy Judge Christopher Lopez. He stated that J&J’s proposal did not have enough support from the claimants. The judge also noted that the company even released legal claims against entities that have yet to file for bankruptcy.

The pharmaceutical company stated that if the claimants accepted the proposal, they would receive between $75,000 and $150,000, depending on the severity of the cancer and the number of claims. J&J also pointed out that the deal was supported by a majority of cancer victims.

However, Lopez criticized that the support came from a voting that was filled with flaws, even though the company managed to collect 90,000 votes. He stated that even if 83% of plaintiffs supported the proposal, about half of the vote had to be thrown away since some vote came from the lawyer who has no authority or proof of consent from the plaintiff.

Based on Lopez’s opinion, he deemed that it is unnecessary for J&J to rush the vote, while plaintiffs’ lawyers testified of being forced to vote instead of a direct vote by plaintiffs.

The pharmaceutical company, however, decided not to appeal, but still refused to settle the claims. The company said that it will use a tort system to litigate and defeat these meritless talc claims instead.

Several parties opposing the deal stated that the wealthy company like J&J is not in financial distress to call for bankruptcy and should not use bankruptcy to prevent victims from seeking justice. One attorney even stated that this was “nothing more than a bad-faith maneuver to avoid full accountability.”