Lawsuit against Johnson & Johnson for alleged “fraudulent” bankruptcies



  • Cancer patients sued Johnson & Johnson, alleging that the healthcare company had a plan to deny patients a court date.
  • The background to the lawsuit is the fact that Johnson & Johnson has filed for bankruptcy several times in order to settle tens of thousands of lawsuits.
  • Johnson & Johnson says the lawsuit is void and represents one of the most comprehensive resolutions in the history of mass tort litigation.

Cancer victims have sued Johnson & Johnson, claiming that the healthcare company “conspired through a series of corporate transactions” to prevent victims of its “asbestos-contaminated” talcum powder from being brought to justice and properly compensated.

The five people who filed the proposed class action lawsuit in New Jersey federal court on Wednesday seek to represent all individuals who had a lawsuit pending as of August 11, 2023, alleging that asbestos or other ingredients in Johnson & Johnson talcum powder products caused them to develop ovarian cancer or mesothelioma.

The lawsuit follows Johnson & Johnson's multiple bankruptcy filings in various states to settle tens of thousands of lawsuits alleging that the company's talcum baby powder causes cancer. Earlier this month, Johnson & Johnson announced that a subsidiary's third bankruptcy filing would allow the company to reach a $6.475 billion settlement for victims, Reuters reported.

A three-month voting period is currently underway to reach a mutual agreement for current and future victims who claim that baby powder caused ovarian cancer. According to Reuters, these make up 99% of the talc-related lawsuits against Johnson & Johnson. People with talc-related claims are the ones who will vote for or against the settlement, according to the news agency.

“This latest motion — again signed by the same small group of plaintiffs' attorneys who have fought every single attempt to settle this litigation to date — is more of the same,” Erik Haas, worldwide vice president of litigation at Johnson & Johnson, said in a statement to USA TODAY. “The question remains: Why don't they let the plaintiffs decide for themselves what is and isn't in their own best interests? Why are they so desperate to stop the vote?

The lawsuit describes Johnson & Johnson’s third bankruptcy filing as an “unfulfilled conspiracy.”

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How did Johnson & Johnson carry out the alleged plot?

The lawsuit says Johnson & Johnson used a “Texas Two-Step” maneuver to commit fraud and stop victims' lawsuits. The tactic involved the company rolling over its talc liabilities and other valuable assets into a new subsidiary, only to file for bankruptcy two days later in 2021, the lawsuit says.

The bankruptcy prevented lawsuits against Johnson & Johnson from proceeding, even though the company itself had not filed for bankruptcy, Reuters reported. The courts ultimately ruled that Johnson & Johnson and its subsidiary had no financial problems and therefore did not qualify for bankruptcy, the news agency said.

Two other tactics Johnson & Johnson allegedly used are called “asset stripping fraud” and “bait-and-switch fraud,” the lawsuit says. In both methods, the company shed or stripped funds and assets, the lawsuit says.

All three “related fraudulent transfers” had the same goal, namely “to prevent and delay victims of claims from obtaining compensation against (Johnson & Johnson) and its operating subsidiaries,” the lawsuit states.

“Make no mistake, the facts are clear”

Despite the allegations made in the recent lawsuit, Johnson & Johnson remains focused on resolving the claims brought against the company.

“Make no mistake, the facts are clear,” Haas said in his statement to USA TODAY. “The company has offered one of the largest settlements in the history of mass tort litigation, winning 16 of 17 ovarian cancer trials, including all ovarian cancer trials over the past six years.”

The company has reached separate settlements with law firms representing mesothelioma patients and with U.S. states that accused the company of failing to warn consumers about the dangers of its talc products, Reuters reported. In a recent trial, a judge ordered Johnson & Johnson to pay $45 million in a mesothelioma case, while the company won an ovarian cancer case, the newspaper said.

“Our focus has been and continues to be on achieving a full, fair and final resolution of this litigation and giving plaintiffs the opportunity to speak for themselves,” Haas said. “We will immediately move to dismiss this latest, frivolous motion.”