J&J Fails to Exercise Creditor Loophole – Talc-Cancer Claims Remain in State Courts

Yesterday, US District Judge Maryellen Noreika refused to allow Johnson & Johnson (J&J) to consolidate 2,400 state court product liability claims before a single judge in a Delaware federal court.[i]

In edition 271 of BC Disease News (here), we reported that the manufacturer of Johnson’s Baby Powder and Shower to Shower products was seeking ‘prompt, fair and complete resolution’ of multi-million dollar talc-cancer ligation, by virtue of its ‘significant financial ties’ with Imerys Talc America – a co-defendant talc supplier that filed for Chapter 11 protection in bankruptcy, in February 2019.

However, the Delaware District Court Judge found, in her 11-page ruling, that J&J could not ‘establish an emergency’ through its ties with Imerys. In addition, J&J had not, like Imerys, filed for bankruptcy protection, nor had it ‘established financial distress’ in relation to ongoing legal action.

Accordingly, J&J’s position did not warrant the immediate transfer of 2,400 state court lawsuits.

The upshot of this decision is that J&J will foreseeably have to adopt a separate defence strategy for each claim, to tackle what it describes as a ‘nationwide scheme of disparate discovery processes ... [that] ... is duplicative, unpredictable, and wasteful’, because ‘the claims raise common questions of fact, law, and science’.

Another consequence of the Wilmington, Delaware decision is that J&J is more likely to be found liable in upcoming trials, as its defence record at state court level has had mixed success.

It is conceivable that yet more share price fluctuation and multi-million dollar compensation payouts are on the horizon for J&J.

 

[i] In Re Imerys Talc America Inc., 19-00103, U.S. District Court, District of Delaware (Wilmington).

Jef Feeley and Margaret Cronin Fisk, ‘J&J's Talc Defense Gets Harder After Cases Kept in State Courts’ (9 May 2019 Bloomberg) <https://www.bloomberg.com/news/articles/2019-05-09/j-j-loses-emergency-request-to-transfer-baby-powder-lawsuits> accessed 10 May 2019.