Cancer victims are suing Johnson & Johnson over what they call “fraudulent” bankruptcy filings the healthcare company has pursued.
These cancer victims have alleged that using the company’s talcum powder products has resulted in them developing mesothelioma or ovarian cancer.
A New Class Action Lawsuit
Five victims have now filed a new class action suit in a New Jersey federal court. This suit seeks to represent any other people who have used Johnson & Johnson’s talcum powder and then developed cancer.
According to the suit, the healthcare company “executed a scheme through a series of corporate transactions” to avoid paying these victims. One of these schemes included filing for bankruptcy multiple times.
Bankruptcy Filings
Johnson & Johnson has indeed filed for bankruptcy more than once and in many different states.
The company filed for bankruptcy multiple times in an effort to help resolve the thousands of lawsuits going after them because of their cancer-causing talcum baby powder.
The Most Recent Bankruptcy Filing
Just earlier this month, the company revealed that it would file a third bankruptcy of its subsidiary company.
According to Johnson & Johnson, this filing would further allow the company to move forward with their settlement proposal to cancer victims. This settlement is $6.475 billion.
A Settlement Agreement
Now a voting period among the victims must begin in order to reach a settlement agreement for this case.
If the victims all agree upon the terms of this settlement, then it should be able to go forward. However, this latest lawsuit could hinder the progress of things.
J&J’s Response
Johnson & Johnson’s worldwide vice president of litigation, Erik Haas, released a statement pointing this out.
“This latest filing – signed again by the same small group of plaintiffs lawyers who have fought every single effort to resolve this litigation to date – is more of the same,” Hass stated. “The question remains: Why won’t they let claimants decide for themselves what is or is not in their own best interest? Why are they so desperate to stop the vote?
A Texas Two-Step
However, the victims who filed this new lawsuit have claimed that the company is just looking to get out of paying its victims. To do so, they’ve stated that Johnson & Johnson has used a “Texas two-step.”
To stop victims from filing lawsuits, the suit alleges that the company has committed fraud. Johnson & Johnson also put up assets and its talcum liabilities into a new subsidiary — and this subsidiary ended up filing for bankruptcy just two days later.
Bankruptcies Halting Victims’ Cases
Once Johnson & Johnson’s subsidiary filed for bankruptcy in 2021, it stopped victims’ lawsuits from continuing — even though the company didn’t file for bankruptcy itself, only its subsidiary did.
This latest lawsuit points this fraudulent activity out. To these victims, the company was simply trying to find a way to halt and then ultimately end these victims’ court cases, all without them having to pay any settlements to them.
J&J Wasn’t Struggling Financially
Eventually, a court ruled that Johnson & Johnson wasn’t struggling financially. Neither was the company’s subsidiary.
As a result, they could not file for bankruptcy, the court ruled. In this latest lawsuit, this evidence is used against the company as what they consider deceitful acts.
Other Fraudulent Acts
The new suit also has claimed that Johnson & Johnson committed other acts, such as “asset stripping fraud” and “bait-and-switch fraud.”
Both of these tactics resulted in the company either cutting or dumping assets and funds. All of this was allegedly done to try to either delay or stop victims from receiving compensation in court.
Other Court Cases
Johnson & Johnson has been in and out of court in recent years. While the company won one ovarian cancer court case, it also was ordered by a judge to pay $45 million in a mesothelioma case.
The healthcare company has also reached settlements in other cases, including one case involving mesothelioma patients.
Resolving These Issues
According to Haas, the company only wants to resolve its court cases with victims. It’s not looking to delay or stop anything.
“Our focus has been and will remain reaching a full, fair and final resolution of this litigation, and allowing the claimants to speak for themselves,” Haas said. “We will immediately move to dismiss this latest ‘hail Mary’ frivolous filing.”
