U.S. Bankruptcy Court Judge Michael Kaplan ruled that Johnson & Johnson be allowed to continue with the company’s controversial spinoff strategy to settle with people who filed lawsuits claiming that J&J’s talc-based baby powder causes cancer. 

A Johnson & Johnson subsidiary proposed on February 18 that it would submit to an independent examination of the corporate restructuring the healthcare giant undertook in an attempt to settle in U.S. bankruptcy court thousands of lawsuits alleging that J&J baby powder and other talc products cause cancer.

Johnson & Johnson baby powder

A Johnson & Johnson subsidiary came under attack in court on February 14 for attempting to use the bankruptcy process to resolve tens of thousands of claims that J&J’s baby powder and other talc-based products caused cancer.

Johnson & Johnson accused attorneys for people who have sued the pharmaceutical giant over the company’s talc products of sharing confidential documents with Reuters in what J&J called a “calculated effort” to try its subsidiary’s bankruptcy case in the press.

Facing thousands of lawsuits related to Johnson & Johnson’s talc-based products, the life sciences giant is launching a separate subsidiary dubbed LTL Management LLC that will take the brunt of potential legal liabilities.

An alleged plan by Johnson & Johnson to spin off a company solely responsible for J&J’s talc-based products in order to mitigate lawsuit damages is still on the table following a ruling by a federal judge.

An Illinois jury on July 30 refused to hold Johnson & Johnson liable for a woman’s death from ovarian cancer, which her family blamed on decades of using the company’s talc-based powders.

The U.S. Supreme Court on June 1 declined to hear Johnson & Johnson’s bid to overturn a $2.12 billion damages award to women who blamed their ovarian cancer on asbestos in the company’s baby powder and other talc products.

Johnson & Johnson was ordered by a New York state judge to pay $120 million in damages to a Brooklyn woman and her husband, after she blamed her cancer on asbestos exposure from using the company’s baby powder.

Missouri’s highest court refused to consider Johnson & Johnson’s appeal of a $2.12 billion damages award to women who blamed their ovarian cancer on asbestos in its baby powder and other talc products.