Johnson & Johnson asked a federal judge on Thursday to dismiss a proposed class action talc lawsuit, calling it a “misguided effort” to derail ongoing settlement talks.
The lawsuit accuses J&J, its consumer health spinout Kenvue and a handful of executives of pursuing “repeat fraudulent transfers and serial bad faith bankruptcy filings” to hinder and defraud talc claimants. It was filed in May after J&J proposed a new bankruptcy plan that would settle tens of thousands of talc suits for about $6.5 billion.
J&J controversially spun its talc liabilities into a separate company called LTL Management in 2021, which has twice unsuccessfully tried to settle cases through bankruptcy. Five plaintiffs filed the proposed class action lawsuit, alleging that J&J has pursued a “fraudulent scheme” to prevent plaintiffs “from ever having their day in court.”
On Thursday, J&J said that plaintiffs “do not now allege that any of the transactions left LTL unable to pay its talc claims.” The company called to dismiss the case, noting that it has “more than sufficient assets to cover those claims.”
J&J continues to pursue a proposed $6.5 billion settlement to resolve a vast majority of its remaining talc claims. The plan is contingent on support from ovarian cancer claimants, who have been asked to vote by July 26. If 75% or more give their support, LTL will file a “consensual prepackaged” Chapter 11 bankruptcy. J&J accused the proposed class action plaintiffs of “pulling out all the stops to undercut” that process.
When asked for comment on Monday, J&J reiterated comments it made in May, noting that the proposed class action suit was “signed again by the same small group of plaintiffs’ lawyers who have fought every single effort to resolve this litigation to date.” The company declined to comment further.
“If J&J wants to argue that we’re interfering with their bankruptcy process, I’m inclined to say yes, we absolutely are,” Andy Birchfield, an attorney for plaintiffs in the case, told Endpoints News on Monday. “The shifting funding agreements, lack of financial distress and conflicting justifications for any third bankruptcy further define the fraud that’s been going on all along.”
Brian Glasser, co-lead counsel for plaintiffs, said J&J’s motion is “untethered to the complaint we filed and will not be sustained by the Court.”
“Jury trials are what J&J fears,” the plaintiffs said in the complaint. “J&J has been able to hinder, delay, or defraud its creditors by doing whatever it chooses without being held accountable for its actions, no matter how egregious.”
Editor’s Note: This story has been updated to include comment from Andy Birchfield, an attorney for plaintiffs.