A federal judge has dealt a blow to a group of cancer victims aiming to block Johnson & Johnson’s proposed bankruptcy settlement over claims that its talc products contain cancer-causing asbestos. The decision, made by U.S. District Judge Michael Shipp on Friday, rejected the plaintiffs’ bid for a preliminary order to prevent J&J from pursuing bankruptcy outside New Jersey, which could have derailed the $6.48 billion settlement plan.
The plaintiffs sought the order as part of a class action lawsuit, arguing that allowing J&J to proceed with bankruptcy would harm their chances of receiving fair compensation. However, Judge Shipp ruled that any potential harm to the victims was speculative, stating that he lacked jurisdiction to intervene in events that might not occur.
Johnson & Johnson aims to secure support from 75% of claimants for its prepackaged bankruptcy plan by a voting deadline of July 26. The company faces a staggering number of lawsuits—over 61,000—alleging its talc products led to ovarian cancer or mesothelioma.
Despite the legal battles, J&J maintains its talc products are safe and asbestos-free, denying any link to cancer. The company argues that the bankruptcy settlement offers a more equitable resolution compared to the uncertainties of the civil justice system, where outcomes vary widely.
Opponents of J&J’s plan, including plaintiffs’ attorneys, view it as a strategic move to shield billions in assets from plaintiffs seeking rightful compensation. Previous attempts by J&J to resolve talc-related lawsuits through bankruptcy maneuvers have been thwarted by courts citing insufficient financial distress of its subsidiary.
J&J’s current strategy focuses on resolving ovarian cancer claims through bankruptcy while separately settling mesothelioma cases. Recently, the company finalized a $700 million settlement with state attorneys general to resolve additional claims.
The outcome of J&J’s bankruptcy proceedings will significantly impact the future of thousands of plaintiffs seeking justice over alleged harm caused by its talc products, underscoring the high stakes involved in this complex legal battle.