Cancer patients file class action lawsuit against Johnson & Johnson for ‘fraudulent’ bankruptcy

NEW YORK — A group of cancer patients sued Johnson & Johnson JNJ.N on Wednesday, accusing the company of repeatedly committing fraud by using shell company bankruptcies to settle tens of thousands of lawsuits. Claims that talc products contain asbestos And it caused cancer.

Five plaintiffs seeking to represent more than 50,000 people who have sued Johnson & Johnson over its talc products have filed a class action lawsuit in New Jersey federal court.

They argue that J&J’s bankruptcy strategy put billions of dollars out of reach to plaintiffs in an effort to thwart, delay and deceive women and prevent them from fighting their cases in court.

“Johnson & Johnson is playing a dark game of chess with this country’s financial and judicial systems,” said Mike Papantonio, an attorney for the cancer plaintiffs.

Eric Haas, Johnson & Johnson’s global vice president for litigation, said the lawsuit was a “Hail Mary pass” by plaintiffs’ lawyers who didn’t want their clients to vote on the company’s latest bankruptcy settlement.

“Why are they so hell-bent on blocking the vote?” Haas said. “Our focus is, and will remain, to reach a full, fair and final resolution of this litigation and to allow the plaintiffs to make their case.”

Most of the talc lawsuits have been brought by women with ovarian cancer, but others involve people with mesothelioma, a deadly cancer linked to asbestos exposure.

J&J maintains that its Baby Powder and other talc products are safe, do not contain asbestos and do not cause cancer.

J&J first used a corporate strategy known as the “Texas Two-Step” to transfer its talc liabilities to a new subsidiary, but that subsidiary filed for bankruptcy in 2021.

Although J&J itself did not file for bankruptcy, the bankruptcy prevented lawsuits against the company from moving forward.

A second similar attempt to resolve the case also failed after a court ruled that J&J and its subsidiaries were not in financial distress and therefore ineligible for bankruptcy.

The company announced May 1 that it plans to file for bankruptcy for a third time if it receives enough votes in favor of a $6.48 billion talc settlement.

Wednesday’s lawsuit seeks a ruling that Texas’ two-step deal was fraudulent because it was done solely to protect J&J’s assets from talc litigation.

The lawsuit also alleges that J&J’s subsequent transactions, including the spinoff of its consumer health business, Kenview, were fraudulent and seeks compensatory and punitive damages.

J&J has said the unit’s planned third bankruptcy will be different because it has support from more than 75% of people with talc-related lawsuits.

The company streamlined its third bankruptcy filing by reaching separate settlements with law firms that represent mesothelioma patients and with U.S. states that had allegedly made it bankrupt.Did not warn consumersThe dangers of talc products.

After the second bankruptcy filing was dismissed, lawsuits against J&J were reopened. In a recent trial, J&J won an ovarian cancer lawsuit but was ordered to pay $45 million in a mesothelioma lawsuit.