(Reuters- By Dietrich Knauth) – A U.S. bankruptcy judge said Tuesday that he may allow some lawsuits that accuse Johnson & Johnson talc products of causing cancer to proceed while the company’s subsidiary seeks a national settlement of the claims in bankruptcy.
U.S. Bankruptcy Judge Michael Kaplan in Trenton, New Jersey said he would consider “two very different paths forward” for the bankruptcy at a July 6 hearing. The company wants the bankruptcy court to estimate the number and value of talc claims, while plaintiffs in the talc lawsuits have asked the court to allow some cases to resume outside of the bankruptcy court.
J&J, which maintains that its Baby Powder and other talc products are safe, assigned its talc liabilities to a new subsidiary, LTL Management LLC, and placed it in bankruptcy in October, pausing 38,000 lawsuits that had been filed against J&J.
The talc claimants have appealed Kaplan’s decision to allow the bankruptcy case to block their lawsuits, and the two sides remain far apart in recent mediation.
LTL attorney Greg Gordon of Jones Day said the bankruptcy court should estimate the overall value of talc claims to impose “discipline” on settlement talks.
“The focus on individual cases when the goal is to come up with an aggregate valuation seems to be beside the point, and kind of misses what we should be focused on,” Gordon said.
David Molton of Brown Rudnick, an attorney for the talc claimants , said that LTL’s approach would cause the case to “malinger” and “fester,” just like other bankruptcies involving asbestos claims. At least 300 cancer victims with claims against J&J have died since the LTL case was filed, Molton said.
Kaplan said both proposals could add clarity to the total value of the talc claims, but both could also offer delays or “cherry-picked” data.
Kaplan said he has talked with U.S. District Judge Freda Wolfson, who is overseeing 35,000 ovarian cancer lawsuits filed in federal court against J&J, about cases that might be re-opened and used as bellwether trials. But he has previously denied requests to re-open individual cases while the bankruptcy proceeds. At least one plaintiff, Vincent Hill, died from cancer after being blocked from resuming his lawsuit.
Kaplan asked LTL and the talc plaintiffs to make further written arguments on the path forward by July 1.
Kaplan also approved LTL’s request to hire former solicitor general Neal Katyal, now a partner at Hogan Lovells, rejecting a U.S. Department of Justice objection that Katyal’s $2,465 hourly rate was unreasonably high.
In approving Katyal’s hire, Kaplan said that one lawyer’s fee, even a very high one, would not meaningfully impact a bankruptcy case that has already generated $50 million in professional fees.
LTL was justified in turning to an expert like Katyal, who has argued dozens of cases before the U.S. Supreme Court, to fend off an appeal arguing that the entire bankruptcy case should be dismissed, Kaplan said.
Before the bankruptcy filing, J&J faced costs from $3.5 billion in verdicts and settlements, including one in which 22 women were awarded a judgment of more than $2 billion, according to bankruptcy court records.
The case is LTL Management LLC, U.S. Bankruptcy Court for the District of New Jersey, No. 21-30589.
For LTL: Greg Gordon of Jones Day
For Talc Claimants Committee: David Molton of Brown Rudnick; Melanie Cyganowski of Otterbourg; Daniel Stolz of Genova Burns; Brian Glasser of Bailey & Glasser; Lenard Parkins of Parkins Lee & Rubio; and Jonathan Massey of Massey & Gail