By Dietrich Knauth
(Reuters) – People suing Johnson & Johnson over the company’s talc products urged an appeals court on Monday to revive their claims, saying the profitable company should not be allowed to use a bankrupt subsidiary to block lawsuits alleging the products cause cancer.
They asked a panel of the Philadelphia-based 3rd U.S. Circuit Court of Appeals to dismiss the bankruptcy of J&J’s subsidiary LTL Management, saying that LTL is a “concocted” corporation set up solely to stop them from getting their day in court.
J&J, which maintains its talc products are safe, spun off LTL in October, assigned its talc liabilities to it and placed the newly created subsidiary into bankruptcy days later.
That restructuring strategy, known as the “Texas two-step,” paused about 38,000 lawsuits J&J was facing alleging that its baby powder and other talc-based products contain asbestos and caused mesothelioma and ovarian cancer.
Critics, including lawmakers and legal experts, say J&J’s bankruptcy maneuver could provide a blueprint for other big companies to avoid juries in mass tort lawsuits.
Circuit Judge Julio Fuentes at Monday’s arguments asked the cancer victims’ attorney Jeffrey Lamken whether the bankruptcy court could provide a more efficient resolution of the claims than trying …read more