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Judge Rejects Johnson & Johnson’s Effort to Limit Talc-Related Suits

Judge Rejects Johnson & Johnson’s Effort to Limit Talc-Related Suits

Johnson & Johnson has faced another setback in its attempt to limit liability in thousands of lawsuits alleging that its talcum powder products are linked to cancer. The plaintiffs argue that the company was aware of the risks associated with its talc products, including its iconic baby powder, for many years.

In an effort to protect itself from the talc litigation, the company established a subsidiary called LTL Management in 2021. Under this strategy, LTL filed for bankruptcy and proposed paying $8.9 billion to settle all the claims against it.

On Friday, Judge Michael Kaplan of the U.S. Bankruptcy Court for the District of New Jersey dismissed LTL's bankruptcy case. The judge ruled that the company was not facing immediate or imminent financial distress, citing the lack of evidence to support such a claim. This marked the second time this year that Johnson & Johnson's bankruptcy attempt was rejected for the same reason, with the U.S. Court of Appeals for the Third Circuit in Philadelphia dismissing the previous effort.

The ruling prompted a drop of nearly 2 percent in the company's shares during after-hours trading. Johnson & Johnson responded by announcing that its subsidiary would appeal Judge Kaplan's decision.  Despite the setback, Johnson & Johnson remains committed to working with counsel representing around 60,000 claimants to seek a resolution for the talc claims. The company ceased global sales of talc-based baby powder this year, opting for cornstarch as the primary ingredient instead.

As the legal battle continues, the implications of this ruling will be closely watched by those involved in the talc litigation and consumers alike.