By Dietrich Knauth
Jan 29 (Reuters) – A U.S. district judge on Thursday dismissed a lawsuit alleging Johnson & Johnson committed fraud by repeatedly attempting to use a shell company’s bankruptcy to resolve tens of thousands of lawsuits claiming its baby powder and other talc products caused cancer.
Filed by five cancer victims suing J&J over its talc products, the lawsuit alleged that the bankruptcy strategy was designed to put billions of dollars out of plaintiffs’ reach in order to “hinder, delay, and defraud these women and prevent them from ever having their day in court.”
The lawsuit stemmed from a sprawling legal battle over J&J’s discontinued talc-based baby powder. Tens of thousands of women have alleged that the products contained asbestos and caused ovarian and other cancers. J&J has said that its baby powder and other talc products are safe, do not contain asbestos and do not cause cancer.
U.S. District Judge Michael Shipp ruled Thursday that the cancer victims could not show that they were harmed by the bankruptcy delays, which stopped their cases from moving ahead in the years between October 2021 and March 2025.
Shipp, who is also overseeing more than 67,000 of the lawsuits against J&J that have been consolidated in multidistrict litigation, said “their claimed injury is entirely hypothetical, as it is contingent on plaintiffs’ first prevailing in the talc litigation.”
Shipp said he could not accept the argument that the delay was itself a form of injury, because that would be “fundamentally incompatible with the structure and purposes of the bankruptcy code.” U.S. bankruptcy law automatically stops lawsuits from proceeding against a debtor, which gives the debtor time to negotiate a comprehensive debt resolution and stops some creditors from claiming assets ahead of others.
Patricia Kipnis, an attorney for the five women, said Thursday that she and her co-counsel “disagree with the decision and will be reviewing it with our clients to discuss an appeal.”
Erik Haas, worldwide vice president of litigation for J&J, said that the court correctly rejected the “wholly meritless claims” in the lawsuit.
J&J had attempted to contain the litigation by using a corporate maneuver called the Texas two-step to place its talc liabilities into a subsidiary company, which then filed for bankruptcy. Courts have rejected that strategy three times, most recently in March. The lawsuits resumed after a proposed $10 billion bankruptcy deal fell apart after a judge found it did not have sufficient support from women who alleged J&J products caused their cancer.
