A U.S. bankruptcy judge on Monday rejected Johnson & Johnson’s $10 billion proposal to resolve tens of thousands of lawsuits alleging that its talc products, including baby powder, caused ovarian cancer. This marks the third time the company’s bankruptcy strategy has been blocked in court.
J&J had attempted to settle the lawsuits through a bankruptcy filing by a subsidiary, after two previous attempts were unsuccessful. However, U.S. Bankruptcy Judge Christopher Lopez in Houston ruled that the company did not belong in bankruptcy.
“While the Court’s decision is not an easy one, it is the right one,” Lopez said, emphasizing that J&J’s proposed settlement lacked sufficient support from the women who alleged their cancers were caused by the company’s products. He also criticized the settlement for extending legal releases to entities that hadn’t filed for bankruptcy, such as retailers and Kenvue, J&J’s consumer health spin-off.
In response, J&J stated it would not appeal the ruling but would instead return to the litigation process, rejecting the idea of settling the claims. “We intend to litigate and defeat these meritless talc claims,” the company said in a statement.
Attorney Andy Birchfield, representing plaintiffs opposed to the bankruptcy settlement, called the move a “bad-faith maneuver to avoid full accountability.” He added, “With this ruling, we are now moving forward without delay to trial, where our clients will finally have the chance to present their cases before a jury.”
J&J had argued that its third bankruptcy proposal in Texas should succeed, as it offered more money and had majority support from cancer victims. However, Lopez criticized the voting process, saying many of the 90,000 votes cast in favor were flawed, with some attorneys voting on behalf of clients without proper authorization or evidence of consent.
Opponents of the bankruptcy strategy, including some plaintiffs’ lawyers and a bankruptcy watchdog, argued that J&J was not in financial distress and should not use bankruptcy proceedings to shield itself from lawsuits filed by cancer victims.
The company faces over 60,000 lawsuits from claimants alleging that its talc-based products, including baby powder, contained asbestos and caused cancer. The proposed settlement aimed to resolve these claims and prevent future lawsuits. However, J&J maintains that its talc products are safe and free of asbestos.
Since 2020, J&J has stopped selling talc-based baby powder in the U.S., opting instead for a cornstarch-based formula. Prior to this, the company had separately settled lawsuits related to mesothelioma, a rare cancer linked to asbestos exposure.
Under the proposed settlement, ovarian cancer patients would have received compensation ranging from $75,000 to $150,000, depending on the severity of their injury and the number of claims covered.
