In a significant reversal of the lower court’s rulings, the Third Circuit Court of Appeals dismissed LTL Management’s bankruptcy filing on January 30, 2023. The decision was based on the grounds that LTL Management, LLC is in financial distress and lacks the required good faith to file such a claim. This is a significant win for the 37,520 plaintiffs who are still active in the MDL. Johnson & Johnson has vowed to appeal.
On September 19, 2022, plaintiffs involved in the talc litigation against Johnson & Johnson asked the Third Circuit to dismiss LTL Management, LLC’s bankruptcy on the grounds that the Johnson & Johnson subsidiary is a “concocted” entity established for the sole purpose of preventing them from having their day in court. The Third Circuit agreed, stating, “Applied here, while LTL faces substantial future talc liability, its funding backstop plainly mitigates any financial distress foreseen on its petition date.”
The attorneys general of Mississippi and New Mexico, with the backing of 41 states and the District of Columbia, attempted to move forward with lawsuits against Johnson & Johnson on the basis that Johnson & Johnson violated consumer protection laws by misleading consumers about the safety of its talc products.
On October 4, 2022, U.S. Bankruptcy Judge Michael Kaplan paused these lawsuits pending the Third Circuit ruling. The states objected to this on the grounds that the bankruptcy court did not have the authority to pause their lawsuits because the state lawsuits are enforcements of the law rather than damages lawsuits. These lawsuits should move forward in light of the ruling.
Johnson & Johnson is also fighting against the talc litigation on another front. On January 18, 2023, LTL Management, LLC filed a disparagement lawsuit against three of the doctors who connected their product to mesothelioma and ovarian cancer. The Johnson & Johnson subsidiary filed a similar case against another doctor last month.
Among LTL Management, LLC’s allegations is that the doctors falsely claimed that talc products were the only source of asbestos exposure by the patients in their studies. It also calls the credibility of the scientific journals where the studies were published into question, claiming there were conflicts of interest and a lack of transparency.
Johnson & Johnson announced in August that it will stop selling talc-based products globally in 2023 more than two years after stopping sales in the United States. The company will substitute cornstarch for talc.