Litigation Update: Skepticism of J & J’s Bankruptcy and a Temporary Change of Venue Halt to 38,000 Talc cases.

by | Dec 1, 2021

On November 10, a federal judge in Charlotte, NC who is overseeing Johnson and Johnson’s bankruptcy trial temporarily halted approximately 38,000 talc-related personal injury lawsuits pending in state and federal courts, ruling the cases are more properly venued in New Jersey. Although the litigation stay gives the pharmaceutical giant a 60-day delay in the proceedings against it, it is viewed as a setback for the company. Last month, J&J created LTL Management LLC, a new subsidiary, in Texas to handle all its talc-related liability separately from the parent company and then quickly filed for bankruptcy in North Carolina, a venue viewed as favorable to these types of proceedings.

Bankruptcy Judge Craig Whitley had appeared to be skeptical of J&J’s legal maneuver from the outset, stating at the hearing that the litigation belonged in New Jersey, pointing to the fact that J&J is headquartered there and the ongoing multi-district talc litigation is already pending there. In a motion filed with the court, a court administrator had argued that LTL had no real connection to North Carolina.

In a brief filed on November 19, the Official Committee of Talc Claimants argued that LTL’s informational brief was “more in the nature of advocacy than factual recitation” and suggested a “case trajectory that is unrealistic, at best”. The Official Committee further maintains that the Chapter 11 case is “untethered to any legitimate Chapter 11 purpose”. In response to J&J’s position that it is “the innocent victim of a tort system run amok”, the Committee points to differing positions taken by scientific studies, the government, the judges, and juries and further indicated that it intended to file a motion to dismiss the bankruptcy.

J&J and LTL maintain that the structure of the Chapter 11 case ensures that resources will be available for future claimants in its cosmetic talc litigation even as it states that there is no link between its talc products and cancer. To date, settlements and verdicts against the company for talc-related liability totals approximately $3.5 billion.

Read more of our posts on the talc litigation.

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