J&J Asbestos Talc Litigation Explained

Analyzing the J&J talc-asbestos litigation will make your head hurt, and we’re just getting started. Johnson & Johnson has set aside $11 billion to settle what most people are calling the first wave of talc-asbestos litigation. This litigation is especially complex because it’s taking place not only in civil court, but also in bankruptcy court. J&J has used a controversial bankruptcy strategy, the Texas Two-Step, to avoid liability judgements. More on that below.

Earlier Warnings on the Dangers of Talc and Baby Powder Went Unheeded

The specifics are different, but in a way, there’s nothing new under the sun. A 1957 talc analysis revealed that contaminants in talc from J&J’s Italian supplier included fibrous and “acicular,” or needle-like, tremolite. That’s one of the six minerals that in their naturally occurring fibrous form are classified as asbestos. The A-word officially appeared in lab reports in the early 1970s. Nevertheless, the company continued its aggressive “a sprinkle a day helps keep odor away” marketing campaign, emphasizing the supposed benefits of regular talcum powder use.

The talc-asbestos coverup began at about the same time the industrial asbestos coverup was unraveling. Both coverups lasted about the same amount of time. SInce these companies had so many chances to do the right thing and refused to step up to the plate, or even leave the dugout, an asbestos exposure lawyer can obtain substantial compensation for these victims. This compensation usually includes money for economic losses, such as medical bills, and noneconomic losses, such as pain and suffering. Additional punitive damages are usually available in these claims as well.

Talc, Asbestos, and Cervical Cancer

Talc, a common ingredient in cosmetics, may seem unrelated to asbestos, a common ingredient in attic insulation. But the two are very similar.

Asbestos mines are often interlaced with talc mines, or at least very close to talc mines. Asbestos fibers often contaminate raw talc at the extraction point. Johnson & Johnson, like most other companies, didn’t want to alert its workers about the dangers of handling asbestos. Therefore, most workers didn’t know they were pulling asbestos-laced talc out of the ground.

Johnson & Johnson Did Not Warn About Asbestos Danger in its Talc Products

Johnson & Johnson couldn’t have conducted scientific tests at mines to look for asbestos. But the company could’ve easily conducted efficient tests at manufacturing facilities. Instead, officials used outdated equipment that allowed trace contaminants to go undetected. Additionally, only a tiny fraction of the company’s talc was tested.

If you used talcum powder, before you get too frightened, keep in mind that intermittent use normally isn’t dangerous. Regular use, like regular asbestos exposure, could cause cervical cancer.

In most cases, cervical cancer is preventable. HPV (human papillomavirus) infections cause most cervical cancer cases. HPV is a sexually transmitted disease, and a vaccine is available. But there’s no vaccine to protect against asbestos poisoning.

When women consistently use talcum powder, the asbestos fibers move up the fallopian tubes to the cervix. These toxins alter cell DNA, causing cancerous tumors to form.

Asbestos could also indirectly cause cervical cancer. These fibers increase the number of free-radical particles in the body. These particles, though they only survive for a fraction of a second, have been connected with cancerous tumors.

Civil Court Issues

Johnson & Johnson faces about 50,000 talc-cervical cancer lawsuits. These lawsuits have been consolidated for pretrial purposes into a single U.S. district court. This consolidation is good news for victims.

First, this consolidation avoids some procedural hurdles, like the statute of repose, that exist in some states. The statute of limitations is a soft deadline that cuts off claims after a certain number of years. An asbestos exposure lawyer can use some legal loopholes to get around this cutoff. But a statute of repose imposes a hard deadline which, in many cases, closes the courthouse door.

Asbestos-Contaminated Talc and National Lawsuits

Additionally, pretrial consolidation helps cases settle earlier. Settling one group of cases is like pushing over the first domino in a line of dominoes. The other dominoes usually fall, and the other cases usually settle.

Finally, the MDL (multidistrict litigation) consolidation process includes several bellwether trials. These trials allow plaintiffs and defendants to test their claims and defenses in front of actual juries. Victims have won most talc-asbestos bellwether trials, and jurors have awarded significant punitive damages in these trials. So, Johnson & Johnson is a motivated seller.

Bankruptcy Court Issues

Before we talk about advanced Texas Two-Step bankruptcies, we should discuss some bankruptcy basics. 

Chapter 11 corporate bankruptcies closely resemble Chapter 13 personal bankruptcies. In each one, the Automatic Stay stops most creditor adverse actions. Furthermore, the corporate entity that emerges from bankruptcy is different from the one that filed bankruptcy.

The 2009 GM bankruptcy illustrates this point. The automaker filed Chapter 11 partially because of the 2008 financial crisis. At the same time, GM faced thousands of lawsuits over defective ignition switches. Chapter 11 gave GM a chance to reorganize and also put off the lawsuits.

Ater the judge closed the bankruptcy, GM’s lawyers argued that the “new” GM wasn’t liable for the negligence of the “old” GM, an argument the Supreme Court rejected.

The Texas Two-Step is a variation of this idea. Johnson & Johnson moved its talc business to a shell company, which then filed bankruptcy. Corporate lawyers hoped that move would stop the lawsuits and absolve Johnson & Johnson of any liability for asbestos-tainted talc injuries.

The Supreme Court has yet to rule on this issue, but courts have consistently held that bankruptcy is a shield not a sword. It protects people (and companies) in financial distress, but cannot be used to frustrate creditors, or personal injury victims, that have legitimate claims.

The Automatic Stay doesn’t apply to talc-asbestos lawsuits because Johnson & Johnson subsidiaries, not the company itself, filed bankruptcy.

Asbestos providers tried to use bankruptcy as an escape hatch in the 1980s and 1990s. The strategy partially worked. Federal judges allowed these bankruptcies, but only if these companies created large asbestos victim compensation funds. When we say large we mean large. Today, some forty years later, these trust funds still contain some $30 billion.

The Latest on Talc  and Asbestos

Although the company has settled many talc-asbestos lawsuits, the litigation is far from over. In fact, it’s getting nastier. Some plaintiffs’ lawyers want a court to invoke the crime-fraud exception to attorney-client privilege and force J&J to turn over emails and other communications among some of its top in-house attorneys. In response, Johnson & Johnson has asked another judge to disqualify some plaintiffs’ lawyers.

Since so much money is at stake, both sides are pulling out all the stops to gain an edge in the eventual outcome, said a source familiar with the campaigns of the warring camps.

Furthermore, in May 2024, the company announced a “prepackaged” bankruptcy that, according to its lawyers, would settle over 99 percent of remaining talc-asbestos actions. A prepackaged bankruptcy is basically a joint financial reorganization plan that a company prepares in cooperation with its creditors that takes effect once the company enters Chapter 11. The aim of a prepackaged bankruptcy, which must be voted on by shareholders before the company files its petition for bankruptcy, is to save expenses and shorten the turnaround time to emerge from bankruptcy.

Plaintiffs’ lawyers object to the bankruptcy for the same reason they objected to the Texas Two-Step bankruptcy. The aforementioned shareholders vote is scheduled for the end of July, so we’ll see what happens then.