Here Are the Groups Fighting Against J&J’s Talc Settlement
Editors carefully fact-check all Drugwatch.com content for accuracy and quality.
Drugwatch.com has a stringent fact-checking process. It starts with our strict sourcing guidelines.
We only gather information from credible sources. This includes peer-reviewed medical journals, reputable media outlets, government reports, court records and interviews with qualified experts.
A final decision on Johnson & Johnson’s multi-billion-dollar talcum powder settlement may come soon. A hearing is set for Feb. 18 for Red River Talc’s bankruptcy. This subsidiary of J&J has filed for Chapter 11 as a key part of completing the settlement.
If approved, the approximately $8 billion settlement would resolve tens of thousands of talc lawsuits. These lawsuits come from plaintiffs who claim the company’s talcum powder is linked to ovarian cancer.
But there is plenty of resistance to the proposed plan. The issues range from medical reimbursements to the controversial bankruptcy method J&J is using to complete the settlement.
Here are the main parties fighting against the settlement’s completion and why they believe it should not be approved.
Government Departments Seek Reimbursement for Medical Costs
Two major government departments are among the latest to enter the battle to halt J&J’s settlement. In late January, the Department of Health and Human Services (HHS) and the Department of Veterans Affairs (VA) both filed an objection to Red River Talc’s bankruptcy, citing their right to reimbursement.
These departments covered the medical expenses for some patients allegedly harmed by J&J’s talcum powder. Therefore, the departments argue they should be eligible for reimbursement for those costs.
Medicare and Medicaid are housed under the HHS department, while Veterans Affairs provides health care to veterans. Currently, there are nearly 60,000 pending lawsuits claiming that J&J’s baby powder caused ovarian cancer.
According to Reuters, the HHS department alone may seek up to $1.1 billion from J&J over these claims.
The company’s settlement plan has been receiving resistance almost as soon as it was announced. Now, the opposition of two major government departments against its completion could further impact the upcoming hearing.
U.S. Bankruptcy Watchdog Continues to Fight Against J&J Settlement
While the objection from Health and Human Services and Veterans Affairs is significant, it is not the first time a government department has fought against J&J’s settlement plan.
The U.S. Trustee has repeatedly attempted to halt the settlement. This group is part of the Department of Justice and serves as the U.S. Government’s bankruptcy watchdog.
It filed a motion to dismiss Red River Talc’s bankruptcy in October and has now filed a new objection against the plan as well.
“This is a case that was filed in bad faith by a shell entity that has no valid restructuring purpose or need for bankruptcy relief,” the U.S. Trustee’s objection stated. “Rather, the principal objective of these proceedings is to obtain a nonconsensual discharge of tort liabilities.”
The U.S. Trustee’s issues with the settlement plan stem from J&J’s use of the controversial Texas Two-Step Bankruptcy to complete it.
In this style of bankruptcy, a subsidiary takes on the primary company’s liabilities and files for Chapter 11 in place of that company. J&J has tried this style of bankruptcy twice before and has not yet seen success.
Settlement Holdouts Object to J&J’s Plan
While J&J has said it has significant support from talc plaintiffs in favor of completing the settlement, not all are on board.
The Coalition of Counsel for Justice for Talc Claimants, which represents settlement holdouts, continues to fight against the settlement. They have joined the long list of parties who have filed objections over the last few weeks.
When J&J announced its settlement plan, it said that it had the support of about 83% of talc claimants. This easily exceeded the 75% approval rate required by the U.S. Bankruptcy Code.
But, the holdouts’ newly filed objection points out that the settlement would resolve tens of thousands of impacted lawsuits “without the consent of all affected claimants.”
The objection also references J&J’s past failed attempts to settle its talc liabilities through this style of bankruptcy. J&J hopes to have more success in a new venue, with Red River Talc’s case placed in front of a federal judge in Houston.
“Two bankruptcies orchestrated by J&J to resolve the same liabilities … were found by the Third Circuit to have been filed in bad faith,” the holdouts’ objection stated. “The Debtor came to Texas to avoid the rulings that governed it and its predecessor.”
Editor Lindsay Donaldson contributed to this article.