A U.S. bankruptcy judge on Monday rejected Johnson & Johnson’s $10 billion proposal to resolve tens of thousands of lawsuits alleging that its baby powder and other talc products cause ovarian cancer. This marks the third time the company’s bankruptcy strategy has failed in court.
J&J has been trying to settle the lawsuits through a subsidiary company’s bankruptcy after two previous failed attempts in the other courts.
However, U.S. Bankruptcy Judge Christopher Lopez, who was overseeing the case in Houston, stated that the company did not qualify for bankruptcy.
“While the Court’s decision is not an easy one, it is the right one,” Lopez wrote.
Lopez explained that J&J’s proposed settlement did not have enough support from women who claimed that J&J products caused their cancer. The proposal was overly broad, as it extended legal protections to entities not undergoing bankruptcy, such as retailers that sold J&J products and Kenvue, the consumer health company J&J separated from in 2023. Lopez noted that the proposal had too many issues to be resolved through bankruptcy.
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J&J said in a statement that it would not appeal the decision but also clarified that it had no intention of settling the claims. Instead, it plans to “return to the tort system to litigate and defeat these meritless talc claims.”
Andy Birchfield, an attorney representing plaintiffs who opposed the bankruptcy settlement, called J&J’s bankruptcy strategy “nothing more than a bad-faith maneuver to avoid full accountability.”
“With this ruling, we are now moving forward without delay to trial, where our clients will finally have the chance to present their cases before a jury and obtain the justice they deserve,” Birchfield said.
