J&J's Talc Unit Pursues Third Bankruptcy Bid in Texas Court

Johnson & Johnson's talc subsidiary, Red River Talc, has initiated its third bankruptcy attempt, this time in Texas, as part of an effort to resolve thousands of lawsuits alleging cancer links to its talc products. This move comes after two previous bankruptcy attempts in New Jersey were unsuccessful.

The company, founded in 1886 by three Johnson brothers, has faced over 38,000 lawsuits related to its talc products since the first case was filed in 1997. Johnson & Johnson has consistently maintained that its talc products, including the iconic baby powder introduced in 1894, are safe and do not cause cancer.

On September 24, 2024, New Jersey bankruptcy Judge Michael Kaplan decided to allow the Texas bankruptcy case to proceed, declining to immediately intervene. This decision comes despite opposition from the U.S. Justice Department's bankruptcy watchdog and attorneys representing cancer victims, who argued that the move was an attempt to avoid previous rulings.

The proposed settlement aims to pay up to $10 billion in value over 25 years to resolve the lawsuits. Red River Talc claims that this third bankruptcy attempt has support from 83% of claimants alleging ovarian cancer and other gynecological cancers from J&J's talc products.

It's worth noting that talc, the softest mineral on Earth, has been classified as "possibly carcinogenic" by the International Agency for Research on Cancer. This classification has led to increased scrutiny of talc-based products, prompting J&J to discontinue talc-based baby powder in North America in 2020 and announce plans to stop global sales by 2023.

The company's legal battles have been significant, with the largest talc-related verdict against J&J reaching $4.7 billion in 2018. These lawsuits have had a substantial impact on the company, which boasted a market capitalization exceeding $400 billion in 2021 and employs over 130,000 people worldwide.

"I will not comment on the merits of venue. That is for Judge Lopez to decide. Good luck in Texas."

The U.S. Food and Drug Administration conducted studies on talc safety in 2009 and 2010, but concerns have persisted. It's notable that J&J's talc supplier, Imerys Talc America, filed for bankruptcy in 2019, highlighting the widespread impact of these legal challenges on the industry.

As one of the largest healthcare companies globally, with headquarters in New Brunswick, New Jersey, Johnson & Johnson has faced various product liability cases beyond talc. The company has paid billions in settlements for different issues, demonstrating the complex legal landscape it navigates.

The outcome of this third bankruptcy attempt remains uncertain, with opponents questioning the voting results and process used to gather support. As the case moves forward in Texas, it will be closely watched by legal experts, stakeholders, and the thousands of claimants seeking resolution in this long-standing dispute.